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A recent report by Steno Research suggests that Ethereum (ETH) is expected to outperform Bitcoin (BTC) in 2025. This projection is based on historical trends and the potential impact of favorable cryptocurrency regulations following the victory of Republican presidential candidate Donald Trump in the November election.
Will Ethereum Shine in 2025?
Despite the overall cryptocurrency market reaching unprecedented levels this year with a record high total market cap of $3.9 trillion, Ethereum, the second-largest cryptocurrency, has not seen significant price growth.
However, Steno Research’s report indicates that Ethereum could reach a new all-time high in 2025, driven by increased institutional investments and favorable regulatory changes. The report predicts that ETH could potentially reach $8,000 in the upcoming year.
While Bitcoin is also expected to achieve a new all-time high of $150,000 in 2025, Ethereum might more than double its current price of $3,400. Additionally, the ETH/BTC trading pair is forecasted to rise from 0.035 to 0.06 within the next 12 months.
The weekly chart shows a decline in ETH’s performance against BTC since September 2022. However, the pair is currently near a crucial support level at 0.035, with expectations of a rebound to the 0.06 level last seen in February 2024.
The optimistic forecast for Ethereum by Steno Research indicates a potential bullish trend for altcoins in 2025. Analyst Mads Eberhardt mentioned that the expectation is partly based on the belief that Donald Trump’s U.S. presidential win will benefit altcoins more than Bitcoin.
The report also suggests that Bitcoin dominance (BTC.D) could drop to as low as 45% from its current level, signifying a shift in market dynamics.
The weekly chart for BTC.D shows a steady uptrend since September 2022, rising from around 39% to a peak of 61%. However, recent price movements indicate a potential decline to approximately 45%.
DeFi Sector Expected to Thrive in 2025
The report also anticipates a resurgence in decentralized finance (DeFi) activities within Ethereum’s ecosystem in 2025. The total value locked (TVL) in decentralized applications is projected to reach a new high of $300 billion next year.
The renewed interest in DeFi could drive up altcoin prices in 2025. Following Trump’s victory in the November election, Ethereum saw a 10% increase in value as improved sentiment regarding DeFi regulations boosted market confidence.
Furthermore, the strong inflows into spot Ethereum exchange-traded funds (ETF) strengthen the bullish outlook for ETH in 2025. Currently, ETH is trading at $3,417, reflecting a 3% increase in the past 24 hours.
Featured image from Unsplash, charts from Tradingview.com